Today, GFX Labs is excited to announce that Interest Protocol is fully operational on Optimism.
Why Optimism?
Layer 2s like Optimism offer significant improvements for the average user – especially in lower gas costs. When considering the DeFi promise of permissionless, open, transparent software that anyone can use, the cost to transact on Ethereum has become a major problem. This is especially true for populations around the world that are not based on very wealthy countries (and already have wide access to financial and other services).
A typical borrowing transaction on Interest Protocol: Optimism costs around 2 cents, which is less than 1% of the typical cost on Interest Protocol: Ethereum. Importantly, this also lowers the initial costs to access Interest Protocol, which can be gas intensive to set up the segregated, noncustodial vault contract for a new user.
While there is no reason to deprecate or halt improving Interest Protocol: Ethereum, we believe the future of Interest Protocol is on Optimism and other frontier markets where transaction costs are low and there is not an incumbent duopoly on borrow-lend software (as there is on manner). The ecosystem on Optimism also allows GFX and other contributors to leverage research and development for Interest Protocol: Ethereum. Major innovations such as acceptance of Balancer pool tokens and Uniswap V3 LP positions and preserving governance rights of collateral all have obvious application to Optimism, where Balancer forks, Uniswap deployments, and standard token-voting contracts all exist.
Additionally, GFX Labs is one of the largest voters in Optimism governance, holds an important seat on the Grants Council, and generally has deep understanding of and relationships in the Optimism ecosystem that led to identifying Optimism as the first non-mainnet deployment opportunity. The company also received a small grant in 2022 to incentivize deployment, so that OP holders could simultaneously delegate and use their tokens as collateral.
How Does Governance Work?
All smart contracts have been deployed, and Interest Protocol governance now has full control. There is no multisig or other centralized arrangement, and all voting will continue to occur on Ethereum, so there is no need to bridge IPT tokens to govern Interest Protocol: Optimism, though IPT holders are free to bridge if they choose to do so.
GFX Labs is the most experienced company in crypto when it comes to setting up cross-chain governance, and Interest Protocol uses the lessons we learned from building cross-chain governance at Uniswap. IPT holders will continue to propose and vote on Ethereum, and proposals that affect the Optimism deployment are relayed through the native bridge on Optimism. Anyone wishing to use their tokens to vote or delegate should continue to keep them on Ethereum.
A new proposal will be posted today to the forum for adding a token collateral to Interest Protocol: Optimism. It will include a technical discussion of how cross-chain governance proposals work, and will serve as an example for other contributors.
Supported Assets At Launch
As of IP governance assuming control of Interest Protocol: Optimism, the protocol is fully functional, and supports 5 collateral assets. Those assets are wBTC, ETH, rETH, wstETH, and OP. As the sole governance token supported at launch, OP tokens are able to delegate their voting power to an address of the user’s choice. All 5 supported assets are capped, and governance can adjust the maximum exposure to each, just as it can adjust that parameter on mainnet.
Additional Information
Until the documentation can be updated, feel free to leave any questions here or bring them up at the next Community Call.